Reviewing Salary Package Expenditures
Use the Salary Package Summary AUS component (which you access in the Review Absence/Payroll Info menu) to review the overall expenditure for an employee's salary package. You can also review the expenditures against individual components that make up a salary package.
Some of the components that are paid through the payroll system do not require close monitoring during the package year, as they are based on the details that you defined in the salary package. For example, expenditures for the employee's salary, health benefits, and superannuation will probably not vary much during the year. However, for components that are subject to ad hoc payments, you might monitor expenditure more closely. For example, an employee's actual spending against an expense account for motor vehicle operating costs could easily exceed the budgeted amount for the benefit if you do not monitor it carefully.
This topic discusses ways to review salary package expenditures.
Page Name |
Definition Name |
Usage |
---|---|---|
GPAU_PKG_EXP_PRD |
View actual and budget summary amounts for a package and its components by pay period. This information is stored in the Package Expense table. |
|
GPAU_PKG_EE_EXP |
View year-to-date employee package expense summary Information. Displays the actual expenses and budget amounts for an employee from the Year-to-Date Expenses table. |
Use the Package Summary page (GPAU_PKG_EE_EXP) to view year-to-date employee package expense summary Information.
Displays the actual expenses and budget amounts for an employee from the Year-to-Date Expenses table.
Navigation
Image: Package Summary page
This example illustrates the fields and controls on the Package Summary page. You can find definitions for the fields and controls later on this page.
![Package Summary page](img/i-cd7d26dn-71ac.png)
Field or Control |
Definition |
---|---|
As of Date |
Indicates the date that the package expense calculation was processed. The page calculations include only those expenditures for the employee up to this date. Note: Totals are divided into three areas—TPV (total package value) Components, TEC (total employee cost) Components, and the Package Total. The TPV Components and TEC Components identify each component, and they display the value of components that add to TPV and TEC respectively. These values include the component value and any additional components that add to that package total. The system also displays Budgeted, Actual, Budget Variance, and Project Year End totals. |
Total Package Value Components and Total Employee Cost Components
Field or Control |
Definition |
---|---|
Budgeted |
The budgeted values for each component and the budget totals reflect in the package component details that you enter and adjust on the Employee Salary Package - Base Components pages. |
Actual |
For each component, the system determines the expenditure based on the payroll type definition on the component. If a component is linked to an earnings type, any payment made against that earnings type is regarded as expenditure against the component if you've set up the component with an earnings type on the Expense Data page. The package expense calculation aggregates expenditure from business expenses and payroll data based on the preceding criteria. This process accounts for the expenditure against the base component amount but doesn't take into account additional component liabilities. Note: For actual expenditure, the values processed through the payroll or entered in business expenses are disregarded for additional components. The system calculates additional component liabilities based on the percentage of the base component amount that has been expended. To display the actual expenditure for the component, the system calculates the additional component liability based on the percentage of the base component amount that the employee has expended. The system calculates these values and incorporates them into the display of the actual expenditure for each component that is listed on the Package Summary page. |
Budget Variance |
This amount represents the difference between the actual amount and the budgeted amount. It is expressed as a percentage of the budgeted amount. The system uses the following calculation to determine percentage variance amount: (Actual Amount − Budget Amount) ÷ (Budget Amount × 100) = Variance Amount |
Project Year End |
Depending on the method that you select for projecting values to year-end for the component, the system calculates this value accordingly. Different components use different methods and rates of expenditure. You identify whether a component is expended on a regular or ad hoc basis when you define components. For components identified with a regular rate of expenditure, the system uses the following method to project earnings: Actual Expenditure ÷ (Total Days in Package Period × Days Passed in the Package Period) For components identified with an ad hoc rate of expenditure the system does not calculate a projection. Because they are expended at an ad hoc rate, it is not possible to presume any future expenditure. Because package periods can be for periods other than a single year, the projection amount is calculated to the package end, not to year's end. |
Over Bud (over budget) |
The Over Bud column displays either Y (yes) or N (no) to indicate whether the component is exceeding the assigned budget limits. The system determines whether a component or the package is over budget by prorating the package budget or the component budget. It calculates the value of the package or component from the start date to the package expense date. To determine any over- or underspends, the system compares the result to the actual expenditure as of the date you last ran the Expense Calculation process. |
Package Total
Field or Control |
Definition |
---|---|
Total Total Package Value and Total Total Employee Cost |
For each column amount that is displayed in the Total Package Value and Total Employee Cost Components group boxes, the system provides the Total Total Package Value and Total Total Employee Cost in the Package Total group box. |
Non-Packaged Components |
Because it is possible in an organization for earnings or deductions not included in the employee's salary package to be paid, the system also displays the non-packaged components. This field identifies the total value of any deductions, earnings, and expenses that are not included as a packaged component but have been paid out to the employee in the payroll. You can see if expenditure outside the package has occurred for the employee, and you can quickly respond to the non-packaged payments. These types of payments may prompt you to perform a package review or some other corrective action. To view the individual totals for these values, refer to the Non Packaged group box on the Period Summary page. The system displays the totals for non-packaged earnings, deductions, and expenses on the Period Summary page if any non-packaged payouts for these earnings types have taken place. Note: You determine the non-packaged components that appear on the Package Summary page by using the Ern/Ded Included page. |
During the package year, you should review package expenditure on a regular basis to identify any potential over-expenditures on the part of the organization or employee.
You need information about employee benefits to determine whether you need to correct an over-expenditure at any time during the package period. Employees might not be aware of the rate of expenditure and may potentially overspend on their expense accounts.
Use the Period Summary page (GPAU_PKG_EXP_PRD) to view actual and budget summary amounts for a package and its components by pay period.
This information is stored in the Package Expense table.
Navigation
Image: Period Summary page
This example illustrates the fields and controls on the Period Summary page. You can find definitions for the fields and controls later on this page.
![Period Summary page](img/i-cd7d26dn-7191.png)
Field or Control |
Definition |
---|---|
Package Start Date and Period End Date |
The period end date is the end date for the pay period that you are viewing. The page calculations include only those expenditures for the employee for that indicated pay period. Note: The information on the Package Summary pages is current up to the date that you run the Package Expense Calculation process, and the page calculations include only those pay period expenditures for the employees up to that date. |
Budget |
The budgeted values for each component and the budget totals are reflected in the package component details that you enter and adjust on the Employee Salary Package - Base Component pages. |
Non-Packaged
Field or Control |
Definition |
---|---|
Earnings, Deductions, and Expenses |
The Package Summary page includes a Non-Packaged Components group box to identify the total values of earnings, deductions, and expenses that are not included as a packaged components. All the other fields on this page are identical to the fields on the Package Summary page. Note: You determine the non-packaged components that display appear on the Package Summary page using the Ern/Ded Included page. |
During the package review process for each employee, you must reconcile expenditure in the previous package period. At this time, you should recover any overpayments, or make any adjustments for underpayments. Salary Packaging enables you to identify these amounts, but it doesn't automate any payment or recovery for package balances.
When reviewing these amounts, you should also consider the balances for each component and consider the reasons for the overspend or underspend before making any adjustments.
For example, at the end of the package period, you might find that one of the employee's salary components is under-spent. You should consider what has caused the underspend for the component. It might be that the employee took two weeks leave without pay. In that case, the underspend is valid and no adjustment should be made. Alternately, an expense account that is under-spent could have been under-utilized, and the employee should receive some adjustment for the balance remaining through payroll.
The actions that you take to acquit a salary package at year's end depend on your business practices. Some organizations allow balances to be carried forward to future years; others pay out or recover differences at year's end.
The Package Summary pages clearly identify package and component overspending and underspending.
Some organizations choose not to control employee package expenditure at the component level. The package total information is most important to package administrators for these organizations. When budgeting or modelling packages, package administrators in these organizations define individual package components in the usual way. But component values act more as a guideline than a rule for tracking expenditures against the employee's package.
For organizations that are concerned with the overall package expenditure overspends and underspends, you can easily identify this information at the package level using the Package Summary pages. The pages also track expenditure at the component level, but expenditure caps are enforced at the package level.
In other organizations, business rules require that the package administrator track expenditure at the individual component level. Using the Package Summary pages, any overspending or underspending of the components is easy to see.
Note: The system does not issue warning messages regarding overspending or underspending of either packages or components in salary packages other than indicating that the package or the components are over- or under-spent on the Package Summary pages.